Are you an Envato author or a Digital product Seller and make your living on selling your creativity on markets like Envato Market, Mojo Marketplace, creativeMarkets or several others. If so, then you may have definitely encountered with IRS individual taxpayer identification number (ITIN) which may have resulted in withholding your 30% income/profit/revenue as Tax for revenue generated in US soil.
As USA has tax treaty with several countries, you may have to find out your counties tax treaty and the percent USA will withhold. In India the tax treaty with USA has agreed upon 15% withhold for revenue generated in US soil under Article12(2). Here is a PDF for US – India tax treaty – Internal Revenue Service if you need one or your accountant/tex advisor ask for.
There is still discussion going on with the ITIN of USA and TIN of INDIA, are they same or play the same role.
“How to apply for an ITIN” if I needed an ITIN to avoid double taxation.
In this post I will provide a detailed explanation of the steps that you must followed to get an ITIN from the Internal Revenue Services of United States.
You will need the following 4 documents to apply for an ITIN:
- Covering letter (reason why you need ITIN)
- Supporting document. (Docs to prove you need ITIN for valid reason)
- Form W-7 (Instruction)
- Certified true copy of your passport’s biological page or any other government issued documents
All documents should be printed on US Letter paper size (8.5 inches x 11 inches). See why US Letter is different from A4 size. Coloring documents should be must be printed in color. US letter is not a common size in India. Shops like Printo and Staples will print the same on A3 paper and cut the paper to US letter size or you can do yourself by measuring yourself by a ruler. Carry the PDF that is formatted for the correct US letter size and you will be fine.
“Do I need a covering letter?”
Its upto you to decide whether you need a covering letter or not. Yes, it is always better to send a covering letter as it helps you to interact with the human/officers at the other end by narrating your story on why you need an ITIN. and this can help avoiding to bounce you application and the process to start to generate you an ITIN.
I decided on sending a covering letter and Here is a sample covering letter.
Supporting document that shows why an ITIN is required
This document tells the IRS why you need an ITIN. This document originates from the person/institution that asked you to provide them with an ITIN. If you are an author then this letter is from the publisher. If you are a service consultant then this letter is from the company that is availing your services.
If you are applying for an ITIN for your spouse/children to claim dependent tax benefits then you may not have this letter. In such case the importance of having a covering letter, where you explain why you need an ITIN, increases.
Certified true copy of your passport
“Obtaining an ITIN from Abroad” page clearifies the document(s) required to apply for an ITIN. I suggest you use your passport because is the only document that can “stand alone”. IRS requires a “certified true copy” of your passport’s biological page, unless you are willing to send them your original passport!
This step is crucial, confusing and painful. So be prepared for a detailed explanation. This step can be divided into 2 sub-steps: one, getting a good copy of the passport and two, getting it certified as a true copy a.k.a Duplicate copy with verified seals.
First step is to get a colored copy of your passport and extra margins left at the bottom for seals and signature by officers and verifiers. IRS requires the copy to be in color with the best possible resolution (300 dpi).
Next you need to certify it as a true copy. IRS clearly states that the copy must only be certified or notarized by any one of the following:
- the government agency (foreign or domestic) which issued the documents,
- employees of the U.S. State Department located in U.S. embassies and consulates abroad, or
- a U.S. notary public who is allowed under U.S. state law to notarize foreign documents.
It is a very simple, no questions asked process and you should be done in less than 10 minutes. Now you have a “Certified True Copy” stamp, an “embossed” US government seal, and signatures on your copy.
Now you have the 4 required documents you will have to courier them to the IRS office in Austin, Texas. Yes you heard me right its texas
Address at which to courier
As per Instruction for Form W-7 if you are using a private courier (FedEx, DHL or UPS) then you need to courier it to the following address. This address is different from the one that is used for non-private couriers.
Internal Revenue Service
Mail Stop 6090-AUSC
3651 S. Interregional, Hwy 35
Austin, TX 78741-0000
Now you wait. Wait for 6 to 8 weeks. That is what I am doing right now! 🙂
If you don’t get the ITIN , after you apply:
If for any reason you don’t get the ITIN from them, then call the Austin office of IRS (1-800-829-1040). After successful verification you will be assigned an ITIN and a letter will be dispatched to you.
Acceptance Agents – India
Praveen Jain C-3, 2nd Floor
Opposite Vaishali Hospital
91 772 788 7799
d/b/a SNP Tax Services A 17 Ram Nagar Colony
Gorakhpur, Up 273008
There are lots of confusion on getting an ITIN,and it whether a TIN from India would serve the same purpose, so suggestions from your side is highly appreciated in this article. This article will be updated as we head to the right direction and get our updates.
Please let us know any update in this, if you possess any.
Example of docs are taken from chiragr